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Charges dropped in tobacco sting

07/21/00

The federal Justice department has dropped the prosecution of a massive cigarette-smuggling case that required years of expensive police work, including undercover operatives and wiretaps.

Federal prosecutors quietly stayed all charges against nine alleged members of an organized cigarette-smuggling and distribution ring that operated in the Edmonton area.
The RCMP bust of the smuggling ring made front-page headlines in 1996. Police seized more than 5,000 cartons of tax-free cigarettes allegedly smuggled into Alberta from an illegal tobacco plant on an Ontario Indian reserve.
The charges were stayed Nov. 15, 1999, but the stay did not come to light until now. A Justice official said it's not the department's policy to publicize the outcome of cases.
The Sago brand cigarettes had been sold surreptitiously everywhere from corner stores to bars to construction sites in the Edmonton area and northern Alberta, and across the prairie and Atlantic provinces, the RCMP said.
Senior federal prosecutor Bob Macdonald said the decision to stay the charges was made after he requested an independent, internal Justice department assessment of the case. Such reviews are standard practice on complex cases.
He insisted the Crown had a strong case. But prosecutors were concerned the case would be dismissed because it had taken too long to come to trial. The Supreme Court of Canada has ruled accused persons have a right to be tried within a reasonable amount of time.
Macdonald said the preliminary hearing dragged on for more than three years, rather than the two weeks it should have taken, because most of the accused chose not to have legal representation. The RCMP investigation had begun three years before that.
"At the end of the day, you're looking at evidence that is six or more years old by the time you go to trial," Macdonald said. Even if the Crown proved many of the delays were caused by the accused, there would be several other justice-delayed-is-justice-denied arguments the defence could employ to have the case dismissed, he said.
Edmonton defence lawyer Sid Tarrabain acted briefly for the man accused of being the smuggling ring's financier.
He confirmed the case dragged on unnecessarily because the accused didn't have lawyers. But it wasn't because they chose not to have legal representation. He said none of those charged could get legal aid and Justice was unwilling to provide them with lawyers to speed the process.
Tarrabain also doubted the strength of the Crown's case.
"I thought it somewhat unfair that (the RCMP) plastered (his client's name) all over the papers as some giant tobacco smuggler," he said. "From what I recall, the evidence didn't bear that out at all."
RCMP Supt. Dennis Massey was reluctant to comment on the failed prosecution, but hinted funding may have played a role.
"Our responsibility is to investigate, their responsibility is to prosecute and we have to live with that," Massey said. "But they are as resource-challenged as we are, let's face it."
Both the RCMP in Alberta and the Edmonton Police Service have complained of a lack of federal and provincial funding to combat organized crime such as motorcycle gangs.
Charges were stayed against Kenneth Edward Jones, Rusty Kim LaMoy, Roman Duda and Bob Ruman, all of Edmonton; Barry Wayne Luprypa of St. Albert; Stan Martin of Stony Plain; Garnet Desjarlais of Mayerthorpe; Raymond Willier and Leo Badger, both of High Prairie.
They had been charged with conspiring to sell illegally manufactured cigarettes.
The illegal cigarettes were manufactured by a native-owned company called Grand River Enterprises, located on the Six Nations reserve near Hamilton, Ont. The company had been denied a federal tobacco manufacturer's licence because it refused to pay excise taxes.
Nine people from the reserve were eventually charged in the massive smuggling operation and, in a plea bargain, agreed to fines totalling $660,000 to avoid jail sentences. Peter Montour, the operation's ringleader, was fined $640,000. He immediately handed over a cheque for $500,000 when he was sentenced. It's estimated the smuggling operation took in $25 million before it was shut down by police.
The cigarettes were allegedly shipped from the Six Nations reserve to a warehouse in the Riel Industrial Park in St. Albert. Police believe the financier of the Alberta operation was bringing in about 40 cases of cigarettes each month from Ontario, making a tax-free profit of more than $20,000 a month.
The cigarettes were resold to distributors for about $850 a case. Each case contained 50 cartons. And each carton was being sold for about $25, which works out to about $3 a package, roughly half the price of taxed cigarettes.